Meriton Apartments Pty Limited v The Owners of Strata Plan No. 72381 (No. 2) [2016] NSWSC 819

Supreme Court New South Wales

Medium Neutral Citation: Meriton Apartments Pty Limited v The Owners of Strata Plan No. 72381 (No. 2) [2016] NSWSC 819 Hearing dates: 13 & 16 March 2015, 26 May 2015, Submissions received on 11 and 25 June 2015 Date of orders: 17 June 2016 Decision date: 17 June 2016 Jurisdiction: Equity Before: Slattery J Decision: See paragraph [103] – [105] Catchwords: CONTRACT – damages - Caretaker Agreement made under Strata Schemes Management Act 1996, Part 4A – caretaker appointed in 2004 to provide caretaking services to two strata schemes and one additional stratum lot of a commercial/residential building complex divided into three parts – the caretaker, the two owners corporations and the owner of the stratum lot are all parties to the Caretaker Agreement – one of the two owners corporations alleged breaches of the Caretaker Agreement and in July 2012 unilaterally acted to terminate the Caretaker Agreement – Court finds in principal judgment no basis for owners corporation's termination and that by the termination the owners corporation repudiated the Caretaker Agreement – caretaker does not accept repudiation and continues to offer performance of Caretaker Agreement – Court decides Caretaker Agreement cannot be specifically performed following repudiation and that the caretaker cannot claim the whole of the promised contractual benefit, but only its loss of profit on the Caretaker Agreement – to what damages, if any, is the caretaker entitled from the owners corporation's breach of the Caretaker Agreement.

EQUITY – hearing as to account of profits or equitable compensation - Court finds in principal judgment that developer owes a fiduciary duty as a promoter to an owners corporation being formed by the developer in relation to the owners corporation's entry into a Caretaker Agreement - developer establishes the owners corporation in April 2004 – owners corporation resolves at an EGM in October 2004 to be bound by a Caretaker Agreement with the developer – whether the developer was in breach of its fiduciary duty as a promoter by failing to disclose information to the owners corporation about its revenues and profits, before the owners corporation resolved to be bound by the Caretaker Agreement – if a breach of fiduciary duty as promoter is established, whether the owners corporation is now barred by delay from any grant of relief setting aside the Caretaker Agreement.